oSIST prEN 18294:2026

SLOVENSKI STANDARD
01-marec-2026
Pojmi in smernice o storitvizaciji in naprednih storitvah
Concepts and guidance on servitization and advanced services
Konzepte und Anleitungen zu Servitization und erweiterten Service
Concepts de logique servicielle et de services avancés et recommandations associées
Ta slovenski standard je istoveten z: prEN 18294
ICS:
03.080.01 Storitve na splošno Services in general
03.100.20 Trgovina. Komercialna Trade. Commercial function.
dejavnost. Trženje Marketing
2003-01.Slovenski inštitut za standardizacijo. Razmnoževanje celote ali delov tega standarda ni dovoljeno.

DRAFT
EUROPEAN STANDARD
NORME EUROPÉENNE
EUROPÄISCHE NORM
January 2026
ICS 03.100.20; 03.080.01
English Version
Concepts and guidance on servitization and advanced
services
Servitization für erweiterten Service
This draft European Standard is submitted to CEN members for enquiry. It has been drawn up by the Technical Committee
CEN/TC 447.
If this draft becomes a European Standard, CEN members are bound to comply with the CEN/CENELEC Internal Regulations
which stipulate the conditions for giving this European Standard the status of a national standard without any alteration.

This draft European Standard was established by CEN in three official versions (English, French, German). A version in any other
language made by translation under the responsibility of a CEN member into its own language and notified to the CEN-CENELEC
Management Centre has the same status as the official versions.

CEN members are the national standards bodies of Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia,
Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Norway,
Poland, Portugal, Republic of North Macedonia, Romania, Serbia, Slovakia, Slovenia, Spain, Sweden, Switzerland, Türkiye and
United Kingdom.
Recipients of this draft are invited to submit, with their comments, notification of any relevant patent rights of which they are
aware and to provide supporting documentation.

Warning : This document is not a European Standard. It is distributed for review and comments. It is subject to change without
notice and shall not be referred to as a European Standard.

EUROPEAN COMMITTEE FOR STANDARDIZATION
COMITÉ EUROPÉEN DE NORMALISATION

EUROPÄISCHES KOMITEE FÜR NORMUNG

CEN-CENELEC Management Centre: Rue de la Science 23, B-1040 Brussels
© 2026 CEN All rights of exploitation in any form and by any means reserved Ref. No. prEN 18294:2026 E
worldwide for CEN national Members.

Contents Page
European foreword . 3
Introduction . 4
1 Scope . 5
2 Normative references . 5
3 Terms and definitions . 5
4 Advanced services . 5
4.1 Introduction to advanced services . 5
4.2 Typical benefits of an advanced services offering . 8
4.3 The advanced services business model . 9
4.3.1 General. 9
4.3.2 Customer value proposition . 9
4.3.3 Value creation and delivery system . 9
4.3.4 Value capture process . 10
4.3.5 Competitive advantage . 11
5 Servitization . 12
5.1 Servitization stages . 12
5.2 Servitization context . 14
Annex A (informative) Case study for advanced services . 17
Annex B (informative) Case study for servitization . 20
Bibliography . 22

European foreword
This document (prEN 18294:2025) has been prepared by Technical Committee CEN/TC 447
“Horizontal standards for the provision of services”, the secretariat of which is held by BSI.
This document is currently submitted to the CEN Enquiry.
Introduction
The business context of product-based organizations is undergoing a significant shift due to the
widespread adoption of digital technology and enhanced connectivity. The seamless connectivity
between products, their producers, and users provides opportunities to redefine how value is created.
Product-based organizations, such as manufacturers, can broaden their business model beyond merely
offering products to offering services based on those products.
This trend of ‘servitization’ of product-focused business models is gaining momentum as it helps
organizations counter the threats posed by commoditization, offers new innovation opportunities and
sustainability benefits.
The software industry started a similar trend in the 1990s with the emergence of the now widely
adopted software-as-a-service (SaaS) model. In SaaS, the focus shifted from selling software as a
product to providing rapidly deployable software capabilities as a service. For producers of tangible
products, creating service-based offerings is even more challenging as it requires these products to be
in use at the customer site, even though the producer remains responsible for the value they create.
Supporting product-based organizations in developing these service-focused business models is crucial
to unlocking their innovative potential. Initially, the concept of product-based organizations in the
context of servitization focused primarily on manufacturers; however, it now increasingly includes
distributors and system integrators.
1 Scope
This document establishes the widely accepted definitions and concepts of servitization and advanced
services to facilitate communication between industry stakeholders. It provides a framework that
explains the breadth of the organizational transformation process required to develop an advanced
services business model. lt also provides guidance on how to envision advanced services and the
requirements for their effective delivery through servitization.
Case studies for advanced services and servitization are provided in Annex A and Annex B.
Although the concepts of advanced services and servitization have originated in a manufacturing
context, the standard is equally applicable to other product-based organizations of any size that seek to
provide any type of advanced services.
2 Normative references
There are no normative references in this document.
3 Terms and definitions
For the purposes of this document, the following terms and definitions apply.
ISO and IEC maintain terminology databases for use in standardization at the following addresses:
— ISO Online browsing platform: available at https://www.iso.org/obp/
— IEC Electropedia: available at https://www.electropedia.org/
3.1
advanced services
complex value propositions where product-based organizations provide performance outcomes to
customers
Note 1 to entry: Advanced services value propositions generally include access to the product (replacing the
product purchase).
3.2
servitization
critical transformation of product-based organizations to strategically reposition to a service-oriented
focus
Note 1 to entry: Servitization implies a fundamental organizational transformation that not only involves
integrating services into product offerings but also changes to management processes and organizational culture.
4 Advanced services
4.1 Introduction to advanced services
There are three types of product-based services: base, intermediate and advanced. Base and
intermediate services offerings focus on supporting the customer’s product while advanced services
offerings focus on providing customers with a critical capability. This is shown in Figure 1.
Figure 1 — Types of product-related services
The three types of services can be described as:
a) Base services
A base services offering covers product-supporting activities such as providing spare parts, warranty
repairs and product replacement. The focus is on providing customers with the product and these base
services support this focus;
b) Intermediate services
An intermediate services offering includes a larger bundle of services such as helpdesk, maintenance
and repair. The outcome of this offering is support for the user and assurance of the product’s condition
and functionality;
c) Advanced services
An advanced services offering is different. The focus of the advanced services offering changes from
supporting a product to supporting the customer’s business which can include the assets, processes and
even the business model of the customer.
To describe the advanced services offering in terms of the product is no longer appropriate. A more
robust alternative is to think of the offering in terms of a capability whereby the manufacturer
undertakes to deploy a bundle of products and services to achieve the customer’s desired goal. The
advanced services offering aims to provide valuable benefits to the customer. Specifically, these services
create value by saving time, reducing costs and risks, decreasing effort, simplifying and integrating
operations, and enhancing quality.
Advanced services offerings often include:
— guarantees of the product outcomes;
— revenue payments structured around the value created;
— performance incentives e.g. penalties for product failure;
— long-term contractual agreements, spanning five, ten or 15 years,
— cost reduction commitments;
— carbon footprint reductions.
The range of advanced service offerings can be further grouped into three focus areas as illustrated in
Table 1.
Table 1 — Advanced services focus options
A. Customer asset B. Customer process C. Customer business
focused focused focused
Focus The product as an asset The business processes The customer's business
within their customer's of the customer within model, of which the
operations which the product sits product is an enabler
Typical offering Product capability Business process Business model
capability capability
Example of Improved product Improved operations, Enabling the customer to
outcome reliability, availability reduced disruption to make new value
and performance production propositions to its own
customers
The three focus options for advanced services can be described as:
a) Advanced services focusing on the assets used by customers within their operations
The most common focus in a business-to-business context is where the advanced services offering
provides a capability at the level of the physical asset within the customer’s operations. The outcome is
expressed in terms of the efficiency and effectiveness of the asset.
Take, for example, a manufacturer of equipment for the weighing and packaging of foods. A value
proposition at the level of the asset might be to provide ‘a guaranteed packed product’, ensuring for the
customer that food products are sealed reliably within a package which has a preserving gaseous
atmosphere. The functional values provided include regulatory compliance, predictable costs and
dependable product uptime.
b) Advanced services focusing on the customer’s business processes
A second option is to focus an advanced services offering on the business processes of the customers
and support the processes to operate more efficiently and effectively.
In this instance, the same manufacturer might offer ‘production assurance’ i.e. the capability to know
that the food production line is fully operational. The functional values delivered would include reduced
production disruptions, simplification of production management, improved awareness of issues and a
reduction in waste caused by the production disruption.
c) Advanced services focusing on the business model of the customer
The third level is to focus an advanced services offering on helping the customer to innovate their own
business model.
Here, the manufacturer might offer a ‘flexible demand’ value proposition, providing the capability to
deal with increasingly varied consumer demands for different types, sizes and formats of food
packaging (e.g. individual portions, food-on-the go, servings). This would give the customer the
potential to increase revenue, as well as reduce the risk of having a limited production envelope,
improving integration with customers and reducing time and costs associated with production
changeover and expansion.
4.2 Typical benefits of an advanced services offering
Advanced services provide benefit opportunities for product-based organizations and their customers.
For product-based organizations, these benefits include:
— Introduction of new technology: Organizations struggle to position their innovative technologies
through traditional product-based value propositions on the market and are exploring new value
propositions to develop these technologies;
— Combat the threat of commoditization: Organizations are threatened by low-cost competitors in
their product market and see advanced services as a way to differentiate from this competition;
— Leverage opportunities of digital technology: Organizations have carried out substantial
investments in the digitalization of their products and are exploring mechanisms for monetizing
these investments;
— Supporting the low carbon agenda: Organizations seek to maintain a close interaction with their
products beyond the factory door and contribute to the efficiency of their products in the field;
especially with respect to fewer carbon emissions;
— Strengthening the adoption of circular economy principles: Organizations see advanced services
potential for realizing circular flows of products while maintaining or even improving their
economic performance;
— Extending the application of their expertise: Organizations can expand the application of their
substantial expertise beyond the development and manufacture of products to their usage;
For customers, the benefits include:
— Transitioning from capital expenditure to operational expenditure: Customers can access advanced
technologies without making significant capital investments, opting instead to pay based on the
outcome.
— Sharing of risk: Customers face limited performance risks since the product manufacturer is
responsible for achieving the desired outcomes.
— Access to expertise: Customers can continuously benefit from the expertise of the product
manufacturer, who guarantees outcomes which often specify continuous improvement
expectations.
— Product reliability: Customers enjoy better-maintained products because any product downtime
incurs costs for the manufacturer.
— Reduced carbon footprint: Customers can benefit from a lower carbon footprint, as optimized
maintenance and continuous efficiency improvements lead to reduced energy consumption.
While the traditional view of servitization primarily focuses on the product manufacturer, this shift in
business model creates additional benefit opportunities for both product-based organizations and their
customers.
4.3 The advanced services business model
4.3.1 General
Advanced services offerings are the focus of advanced services business models, which describe activity
systems that create and deliver these outcomes to the customer. Using the advanced services business
model illustrated in Figure 2, organizations can develop their own advanced services offerings to fit
with their business strategy and desired outcomes. It illustrates how the customer considers the value
proposition, the value creation and delivery system and the value capture process along with how these
components combine to deliver competitive advantage.
Annex A provides a case study demonstrating the use of the advanced services business model.

Figure 2 — Common elements of the advanced services business model
4.3.2 Customer value proposition
The customer value proposition describes the combination of the advanced services offering (what is
provided) and the outcome (the results for the customer of accepting the offering). The customer value
proposition should be phrased as a statement that clearly identifies what a customer will receive and
what it will do for them. In the example in Annex A the boiler manufacturer offers to ‘provide 20°C
during specific hours of the day across the specified properties’ as the focal value proposition of its
‘Comfort as a Service’ business model.
4.3.3 Value creation and delivery system
Value is delivered through an integrated system of:
— customer-centric performance measures;
— decentralized facilities;
— extended design and production capabilities;
— digitally-enabled products;
— customer-centric service teams;
— proactive processes;
— network partners.
The organization should have certain organizational resources and processes in place to deliver the
advanced services value proposition. The principles underpinning the design of traditional production
systems (such as Lean) are well understood and are familiar to many. The principles guiding the design
of the product-based organization to deliver an advanced services business model are different in seven
key areas.
a) Performance measurement systems
Rather than being concerned with cost, quality and delivery, the development of performance
measurement systems for advanced services should focus on outcomes aligned with the needs of the
individual customer. Key Performance Indicators (KPI) should be aligned with the customer’s own
indicators;
b) Facilities
In addition to large centralized factories, the organization may also establish additional distributed
facilities that are located near to the customer’s operating sites;
c) Design and production capabilities
There are additional and extensive front-office customer facing activities which should be aligned
around the services offered, with design and production capabilities operating in a supporting role to
enable the delivery of the service value;
d) Digitally-enabled products
Information and communication technologies should be used to gather monitoring data to predict
maintenance and repair needs, and record the use of products within the customer’s processes;
e) Service team
The staff dealing with customers should be adaptable, technically adept relationship builders with a
service-centric culture;
f) Processes
Processes should be proactive and foster strong inter-organizational relationships with the customer so
that the condition and use of products in the field can be managed proactively;
g) Networks
The organization should be able to collaborate with a wider range of providers, partners and
contractors to deliver its value proposition.
4.3.4 Value capture process
The advanced services business model features usage-based revenue models that align rewards to the
value generated by the customer.
The value capture process describes how the organization derives revenue from delivering the
customer value proposition. The revenue model should specify what the customer pays for and how
they pay for it. It should not cover how much the customer pays, as this is a separate question of pricing.
Customers commonly pay in one of three ways: fixed payment, variable payment or a hybrid of these
two. Fixed payments are typical of rental services, whereby the customer acquires the right to use a
product for a contracted period. The payments might be made through a flat fee (e.g. per month or per
quarter) or flexed to reflect peaks and troughs in the customer’s cash flow, but either way, the amount
paid annually is the same and is a pre-agreed set amount.
Variable payments link charging to either operational or financial performances. Examples are ‘pay-per-
use’ and performance-based payment. Payment on these terms helps to align the organization with
delivering to the customer’s priorities, because the more the customer achieves, the more the
organization is paid.
On this basis, six principal types of revenue models exist as shown in Table 2.
Table 2 — Types of revenue model
Fixed payment Variable payment Fixed and
variable
payment
Flat fee- Profile- Usage- Output- Outcome- Hybrid-
based based based based based based
(Type 1) (Type 2) (Type 3) (Type 4) (Type 5) (Type 6)
On what Pay set Pay differing Pay as the Pay for the Pay for the Pay for some
basis does amount per proportion capability is output (financial) combination
the month or of annual fee used achieved results of types 1
customer quarter for per month achieved to 5
pay? fixed term or quarter,
based on
peaks and
troughs in
customer’s
operation
Organizations should identify the revenue model that complements the other components of the
business model, in particular, the customer value proposition.
4.3.5 Competitive advantage
The fourth aspect of the business model is the competitive advantage, i.e. what makes a company well-
placed to deliver the chosen business model. The competitive advantage for a product-based
organization in delivering an advanced services business model lies in its intellectual property (IP) and
the knowledge generation processes intrinsic to research, design and production. A product-based
organization’s advantage in adopting an advanced services business model is that, in most cases, it
holds the design authority and IP for its products. This means it can be more responsive to product
failure, re-engineering products so that they a
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